TechCrunch reported that Credit Sesame, the company that offers loans and opportunities for consumers to improve their credit, has launched a digital only bank through Community Federal Savings Bank.
It joins a crowded market of other neo-banks, challenger banks, and general purpose reloadable prepaid cards that offer no-fee accounts, early payroll access, no overdraft options and a debit card with surcharge-free ATM network access.
Here’s more on the product offering:
The new service, Sesame Cash, has many features found in other challenger banking apps, like a general lack of fees, real-time notifications, an early payday option, free access to a sizable ATM network, in-app debit card management and more. Specifically, Credit Sesame says it won’t charge monthly fees or overdraft fees, and it provides free access to more than 55,000 ATMs and a no-fee debit card from Mastercard.
A likely reason for offering this account is that Credit Sesame will be better able to track consumers’ deposits and spending habits, which can help inform its credit underwriting capabilities and provide more accurate financial advice through its mobile app. This is a much better route than trying to get consumers to link the app to their primary financial institution.
One point of distinctiveness that Sesame Cash has developed to separate itself from the crowd is a reward system that rewards good credit building habits. Other challenger banks are more focused on attracting so-called “hot money” thorough higher than market average savings rates:
Other features also differentiate Sesame Cash from rival challenger banks, including built-in access to view your daily credit score and a system that rewards consumers with cash incentives — up to $100 per month — for credit score improvements. The banking app includes $1 million in credit and identity theft protection, as well.
In the months following its launch, the company is planning to introduce a smart bill pay service that manages cash to improve credit and lower interest rates on credit balances, plus an auto-savings feature that works by rounding up transactions, a rewards program for everyday purchases and other smart budgeting tools.
Overview by Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group